Nidec posts ¥564.6 billion net loss as auditor PwC refuses to verify earnings

Financial losses and audit disclaimer

Nidec Corp. reported a consolidated net loss of ¥564.6 billion for fiscal 2025, which concluded in March 2026, shifting from a revised net profit of ¥84.6 billion in fiscal 2024. The Kyoto-based motor manufacturer recorded an operating loss of ¥518.9 billion, compared to an operating profit of ¥128.2 billion in the preceding twelve months. Consolidated sales grew 3.9% year-on-year to ¥2,708.7 billion. The annual deficit stemmed primarily from ¥632 billion ($4 billion) in impairment charges affecting its automotive parts division as well as appliance, commercial, and industrial product units in China. These writedowns followed ¥482 billion in previous charges tied to accounting irregularities, bringing cumulative charges above ¥1 trillion ($6.36 billion). In addition, Nidec recognized ¥30.5 billion in special losses to cover ongoing internal investigation expenses.

Independent auditor PwC Japan Group, through its PwC Kyoto affiliate, issued a formal disclaimer of opinion on Nidec's consolidated financial statements and internal control report. The auditing firm stated that it was unable to obtain sufficient and appropriate materials to verify the accounts. PwC Kyoto noted that individuals who were aware of or involved in improper accounting practices, or who had previously submitted false statements, remained active in the financial reporting process. The auditor cautioned that undiscovered errors could carry material and pervasive consequences for the reported financial condition.

Management upheaval and founder scrutiny

The release of the delayed annual results coincided with executive turnover across Nidec's leadership team. President and chief executive Mitsuya Kishida, who had been tasked with leading corporate restructuring, resigned on 29 September 2026 immediately prior to the publication of the financial statements. Nidec appointed Michio Kaida to replace Kishida as president, with Kaida scheduling an introductory press briefing for 1 October 2026. The leadership change followed the departure of founder Shigenobu Nagamori, who stepped down as representative director in December 2025 to assume responsibility for the accounting scandal. Nagamori established Nidec in 1973 in a Kyoto prefabricated hut alongside three university graduates, completing 75 acquisitions over 42 years to turn the business into a global precision motor supplier.

Sequential scandals and exchange scrutiny

The accounting irregularities were first identified in September 2025, prompting the Tokyo Stock Exchange to place Nidec stock on special alert status in October 2025. The company's compliance challenges expanded in May 2026 when an internal inquiry revealed separate instances of product quality fraud. Under Tokyo Stock Exchange regulations, Nidec faces a potential delisting in October 2026 if it fails to prove that it has overhauled internal governance controls and accounting integrity.

Market response and forward outlook

Following the earnings publication and the auditor disclaimer, Nidec shares dropped by up to 20% on the Tokyo Stock Exchange on 1 October 2026. The company provides electric motors and components to automotive manufacturers including BMW and Volkswagen. Despite the annual loss, Nidec management issued guidance projecting a return to profit in fiscal 2026, forecasting group net income of ¥100 billion. The company stated that the impairment charges reflected assessments regarding the future recoverability of goodwill and operational assets in weakened markets.